Courtesy West Marine

Chuck Rubin became CEO of West Marine in December, following a career that included being CEO at Ulta Beauty and the craft brand Michaels, as well as being president of North American retail for Office Depot and a partner at the information-technology company Accenture.

His arrival at West Marine marked the company’s third CEO in as many years, with Ken Seipel in 2021, Eric Kufel for most of 2022, and now Rubin in 2023. One of Rubin’s first big moves was completing a recapitalization that will provide the company an aggregate $150 million of additional capital heading into the summer boating season — a move that led Moody’s and S&P Global to publish immediate downgrades, calling the transaction “distressed” and “tantamount to a default.”

Rubin sees the recapitalization as a repositioning of the company to get back to basics on its retail roots. “In 2021, it was bought by a private equity firm named L Catterton, a global private equity firm that’s very focused on growth,” he told Soundings Trade Only in mid-March. “And I think that it took a little bit of time for them to understand what the company needed.”

Courtesy West Marine

Stronger retail skills, he says, were on the list. “Retail has evolved over the past number of years, and what digital has done to retail has been game-changing for every retail company,” Rubin says. “And certainly it presents new opportunities for West Marine. I think L Catterton recognized that the company needed to go back to some basics in retailing, some blocking and tackling of good retail skill sets. And that’s why I’ve come into the company.

“Eric’s a very sharp business guy,” Rubin adds. “I’ve known Eric for a number of years, but he doesn’t have a deep retail background. And I think Eric himself recognized that that skill set was missing within the company. And as a result, that’s why I’m here.”

Soundings Trade Only talked with Rubin about the recapitalization, West Marine’s in-stock and retail pricing goals, and more in this interview, which was lightly edited for clarity and space.

Courtesy West Marine

Was there a public announcement when you took over in December?

I believe there was one made, but there wasn’t a lot of fanfare about it, for a couple of reasons. One is just in general, I believe in performance being more important than the fanfare around a new CEO coming in. And second, quite honestly, we were very focused on the refinancing of our debt, which has been concluded now. And now’s the time that we’re trying to be out there explaining what we’re doing and how we’re going to make this company even better than it has been.

You’re not just from outside of boating; you’re from outside the outdoor recreation market altogether. How did you come into this job at West Marine?

I have been almost a lifelong boater. So I’m not outside the industry from a consumer standpoint. I’m outside the industry from a worker standpoint, if you will, but I have lived the life of what a lot of our customers live, which is enjoying the thrill of boating.

And in the marine life, I lived almost my entire life near water, whether it was the ocean or a lake. When you combine that with the fact that I have been a retailer my entire life, I think it’s a very good combination.
Also, I did spend a number of years working in the sporting-goods industry. So I’ve been the head merchant of fishing and canoeing and paddleboarding, as it relates to sporting goods, many years ago. But at the end of the day, I was a customer of West Marine long before joining them.

What kind of boats did you grow up with? And what do you have now?

I grew up for many years in a unique situation where I didn’t own the boat, but I had friends that owned a boat. So for years, I have boated in the Gulf of Mexico. A close friend of mine has a 26-foot Twin Vee power cat. So I have fished throughout the Gulf of Mexico on that. Then, when I lived in Texas, I had a wakesurf boat, a Supra. But now I’m back in fresh water, and I have a Boston Whaler 350 Realm, which as recently as yesterday I was on. The Realm is a great boat. It’s kind of the minivan or the SUV of boats. It has a cabin, which is nice to have. It has a head, which is nice. You can fish on it. The last few Sundays, quite honestly, have been more just for cruising and going out to lunch.

Let’s talk about the recent recapitalization. It freed up about $150 million. Moody’s and S&P then downgraded the company. S&P called the move “tantamount to a default.” I know from your press release that you think this was good for West Marine. Can you talk about why?

I don’t want to go into S&P and Moody’s ratings. Credit agencies have a role that they play. The reality is, with us refinancing, the company has the liquidity that’s needed to continue to invest in our business. And fundamentally, you know, the company is over 50 years old. And it’s had a really good foundation built over time. And the company’s maybe lost its way over the past few years. And that’s what’s led to some of the challenge.

But now, with this refinancing, the liquidity is the best for us to continue to invest in our stores, invest in our digital presence, invest in our B2B business, which we call our Pro business. So I wouldn’t describe this as a good thing; this is a really good thing. It takes the focus for the company away from managing the balance sheet and puts it back on managing our business, so that it’s good for customers and our crewmembers and our owners.

There’s no danger of seeing West Marine stores with empty shelves or stores closing altogether?

Generally, no. However, we have stores that we could end up relocating. So could you see us close a store and relocate it? Yes. And we have out-of-stocks that have nothing to do with our financial position. It’s a question of getting the inventory in. So those are the types of things that we’re working on. And in fact, in the past 45 days or so, our in-stocks have improved dramatically. That’s one of the challenges that the company had last year. Our position today is significantly better than it was before.

Part of this recapitalization was a way to give West Marine more buying power for inventory. Are you anticipating any changes in brands, types of products or overall inventory mix? And how do supply-chain issues feed into that thinking?

I think there were opportunities for us to continue to listen to our customers. There were certain brands that we either don’t carry at all today, or don’t carry them in as much presence as we would like, that we’re working to add to our assortment. Please don’t ask me what those brands are; I don’t think that’d be appropriate. But we are working aggressively. And we actually hope that over the next couple of weeks, we’ll be able to make some exciting announcements. I will tell you, we’re having very good success in our discussions with some of these brands. Because again, they recognize the power of West Marine.

I’m particularly focused on the core parts our business: the maintenance, the electrical, the plumbing. West Marine is a place that you come where you can find all the newest stuff, but it’s also a parts store, where if you need to replace your bilge pump, you want to come and either find it in-store, or you want to buy it online and have it delivered to you, wherever you might be. So ensuring that our in-stocks are better than they had been in the past is really critical for us. And again — I can’t stress this enough — we’re making really good progress on this.

And then when you layer onto it, where you buy it online and pick it up in-store, or it’s shipped to the customer, whether the customer is at the marina or whether the customer is at their home, we’re trying to make this more convenient for the consumer or the Pro customer. Because at the end of the day, retail is about providing customers solutions to two problems that they have. One of the problems is product availability, and we’re getting much better. The second is, make it easy for me to shop, deliver it to me where I want it to be. And here again, it’s a key focus for us.

We looked at comments that readers posted online with the recapitalization story. Some said they can get the same products for less money elsewhere. Are you looking at adjusting pricing?

Not only are we looking at it, we already have, to a large degree. Our focus is to be fair-priced. And what that means is similar to what Walmart is. Walmart isn’t always the lowest-priced provider for every
product that they carry. It’s hard in today’s day and age when you have tens and tens and tens of thousands of SKUs to guarantee that. But we should be fair-priced. And when you layer on top of that being in stock, and then delivery convenience, then there’s a really compelling value proposition.

We monitor our pricing very closely. Our pricing is very much in line with our competition. And we think the advantage that we offer, what makes West Marine really unique, is that while every retailer has competition, and we clearly have ours, but no one really looks like us, no one has the Pro business, the digital business and the brick-and-mortar business the way we do. And when you combine all those, it creates a really attractive solution.

Talking about those competitors, where do you think folks are going to look for the lower-priced options? Who are your biggest competitors?

It’s funny. In retail, what I’ve discovered over the years is that competition comes from lots of different places. I ran Michaels, the craft retailer, for many years. And it’s similar to West Marine in the sense that it’s a very large SKU base that turns the inventory very slowly. You have big discounters who skim off a part of that business, just like we do in our business. And then you have specialty people who play in a different part of the business. So it’s hard to articulate just one or two competitors that are out there. There are brick-and-mortar players, there’s clearly digital players, there are Pro and B2B players.

We work hard to make sure our prices are competitive every day against the broadest range of competition. But things change very quickly. And we have to keep an eye on a whole range of players that are out there. Our focus is to be very fair in our price and to offer the occasional promotion to make it even better. But to leverage the uniqueness of our business model — someone out there can always offer a dollar or two off of an item if they’re an obscure player. But when you look at our online and our in-store offering and the convenience it provides to both our consumers and our Pro customers, we think that really sets us apart from pretty much any of our competitors.

What are your other goals as CEO? Anything we haven’t talked about?

We’ve talked about it, but the consumer, whether it’s B2B or B2C, the consumer has to be the focus of what we do. At the end of the day — and I have talked at length about this with our team here — I’m old enough to have been around retail a really long time. And it used to be that the retailer could dictate the terms to the customer. The world has reversed; the customer now dictates to the retailer. And fundamentally, I don’t think customers care all that much about what a retail company has to say anymore. What they care about is the problem that they’re trying to solve. And the retailer who does that best wins.

We’ve got to have the parts, we’ve got to have them in stock, we’ve got to have them priced competitively, and we’ve got to be able to deliver them wherever and however the customer wants. And then we’ve got to have all the fun things that go around the parts, whether it’s the new electronics, whether it’s the new apparel, whether it’s the new, you know, canoe that’s out there.

That’s the overarching objective of what we’re about. But to do that requires us to be really good merchants, and we have to find great products and great vendors. We have to be really good digitally, to be able to both communicate with customers as well as offer them a website that’s easy to shop. We have to be really good at supply chain so that we deliver product when and where it should be delivered.

All of these are just components, but if you don’t keep an eye on the broader picture of what I just described, the functional pieces of it, you become less coordinated, and retail today is very much a coordinated, ultimate team sport. You could have the greatest merchant in the world, and if they don’t have a supply chain or a store organization that’s also working in tandem, what the merchant does is not as relevant. So our focus is, listen to the customer, deliver great solutions to that customer, work as a team functionally so that the left and the right hands are coordinated. I’ve been here about 90 days, and I’m very pleased at the progress that we’re making.

With all the talk about a possible recession and other economic factors, what is West Marine doing to be able to withstand an economic storm?

The refinancing getting concluded was critical. That gives us plenty of breathing room to weather different conditions that are out there. We are very cognizant of our data and our numbers. Our general belief is that our business is less reliant upon new-boat sales than maybe some people would believe it is. There’s a very large
installed base, and that installed base has to be maintained. When you go back over the long history of the company, the economic ups and downs have not had quite the impact on this business as it does on other retail businesses. People have a need to maintain that pretty large investment that they’ve made in their boat.

The nice thing about retail is you get a report card the next day of how you did the day before. We’re very disciplined about managing that. And we’re going to continue to execute against our plan. Hopefully, we don’t see this big economic downturn, but we’ll be prepared if there is some trouble in the broader economy.

Is there anything else you’d like readers to know?

Let me just go back and stress, one thing that makes West Marine really appealing is it has a great legacy. And the legacy isn’t just the years it’s been in business. It’s a legacy of a brand name that those years of being in business has created. Everybody knows West Marine. If you boat at all, you know West Marine. And there’s an affection for the brand.

And then when you add to that the unbelievable crewmembers we have. I’ve had the good fortune of running a lot of retail companies. I’ve never seen a company with the tenure and the passion of our crewmembers. It’s incredibly common to meet people with 10, 15, 20, 30 years of experience working for West Marine. I think that sets us apart. When a customer needs an answer, we have the expertise, and that’s really hard to find on a website alone, or in a mass retailer who carries some parts when you are doing work on your boat. Yes, you need the product in stock. Yes, you want a competitive price. Yes, you want good delivery, but you want to have somebody that you can ask a question.

I love boating, I love the marine life. But I’d be lying if I told you I was really good at fixing my own boat. Being able to come into a West Marine and ask questions and get good answers, that’s something that is incredibly unique and, we think, incredibly powerful. And we think it’s something really attractive for the company to tap into more aggressively than we have to this point. 

This article was originally published in the May 2023 issue.